Oil rose for a sixth straight session on Thursday, touching its highest price in a year near $76 US a barrel after data showed a modest fall in American crude stockpiles and the U.S. dollar stayed weak.
U.S. crude for November delivery rose 6 cents to $75.24 a barrel by 6:30 a.m. ET, after climbing as high as $75.96 earlier in electronic trading, its highest since October 2008.
U.S. crude stocks fell 172,000 barrels last week against expectations of a 700,000 barrel rise, according to data from the American Petroleum Institute (API) on Wednesday.
"The API overnight was slightly supportive, as there was a bigger-than-expected drawdown on gasoline, but really the market is waiting for confirmation in the DOE stats," said Tony Machacek, a broker at Bache Commodities in London.
Traders will look to weekly jobless claims and U.S. government Department of Energy's (DOE) Energy Information Administration (EIA) inventory data later in the trading session for confirmation that fuel demand in the world's largest economy is rising.
Further support for crude came as the Dow Jones industrial average rose above 10,000 points for the first time in a year on Wednesday, while the dollar slumped to a fresh 14-month low against a basket of currencies.
FUNDAMENTALS WARNING
Crude, up 1.8 percent on the year, is now in positive territory on a year-on-year basis for the first time since Oct. 10, 2008. The six straight days of gains mark its longest winning streak since July.
Oil has marched in step with a recovery across markets, echoing rallies in equities, gold and base metals based on the view that economic recovery was gathering strength.
But traders and analysts remained wary that rising prices based on expectations of a revived economy were out of step with still fragile demand for oil.
"There is currently no fundamental reason supporting a price rise and the path back to $100 per barrel will be a long and protracted one," analysts at JBC Energy in Vienna said in a note to clients.
"Poor oil fundamentals, including 6 million b/d of OPEC spare capacity, a massive middle distillates stock surplus and terrible refining margins will keep the upside potential in check," JBE said.
U.S. weekly jobless claims due at 8:30 a.m. ET will shed more light on the pace of economic recovery. A Reuters poll of economists forecast 525,000 new filings compared with 521,000 in the prior week.
